The basic rule (CTA 2010, s. 279) is:

‘If a company carries on any oil-related activities as part of a trade, those activities are treated for the purposes of the charge of corporation tax on income as a separate trade, distinct from all other activities carried on by the company as part of the trade.’

Corresponding provisions for income tax are contained in ITTOIA 2005, s. 16.

‘Oil-related activities’ means any activities of a company:

(1)in searching for oil in the UK or a designated area or causing such searching to be carried out for it; or

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